Denver-based Medicine Man Technologies Inc., which does business as Schwazze (OTCQX: SHWZ) (NEO: SHWZ), posted an $18.5 million loss for the full year of 2022, due to various acquisitions and its entrance into New Mexico.
The loss follows a $12.8 million profit in 2021.
The bottom line, however, was just about the only number for Schwazze that was down. The company posted solid increases in revenue, profit, retail sales, and cash flow for both the full year and for the fourth quarter:
- Revenues increased annually 47% for the year to $159.4 million, from $108.4 million in 2021. For Q4, revenue was up 51% to $40.1 million.
- Gross profit was up 72% to $85 million, from $49.4 million. For Q4, profit was up 89% to $23 million.
- Retail sales were up 92% to $141.3 million, from $73.8 million. For Q4, sales were up 87% to $36.9 million.
- Cash flow was up 35% to $11.4 million, from $8.4 million. For Q4, cash flow was up 50% to $5.4 million.
Schwazze also went on a seven-company acquisition spree in 2022, which leadership said leaves the company well-positioned for the coming year – but also with less cash on hand. At the end of 2022, it had just $38.9 million in the bank, compared with $106.4 million at the close of 2021.
As part of the acquisitions and New Mexico expansion, operating expenses shot up by 85% to $72.2 million, and the cost of goods and services increased by 26% to $74.3 million.
The expansions and acquisitions last year included:
- 10 dispensaries, four cultivation facilities, and a manufacturing facility in New Mexico, making Schwazze a small regional multistate operator.
- Two dispensaries in Boulder, Colorado.
- Two indoor cannabis grows and a dispensary in Denver.
- Two dispensaries in Glendale and Manitou Springs, Colorado.
The company also signed deals to acquire two more Colorado storefronts – one each in Fort Collins and Garden City – as of the first quarter this year, bringing its retail footprint to 45 dispensaries.
“Schwazze is well-positioned to play offense in this challenging environment,” CEO Justin Dye said in a press release. “As market forces become more favorable, we believe Schwazze will emerge with a much stronger position… For now, we will keep executing our strategy and playbook.”